The purchase is the beginning. Consider your deposit, existing debts and ongoing property costs together, then explore lending options for your investment purchase.
A useful plan includes the costs after settlement.
/01Purchase funding
/02Ongoing cash flow
/03Loan structure
Two sides of the plan
Fund the purchase. Allow for the holding costs.
Your available funds and your ability to manage another property answer different questions. Both need attention.
/01
I am buying my first investment.
Build the funding position
Allow for the deposit, stamp duty, legal work and inspections. Include any immediate repairs and the cash you want left after settlement.
/02
I already own property.
Consider the existing commitments
Include every relevant loan and ongoing expense. Equity may help fund a purchase, but it does not replace the income assessment for additional debt.
/03
The rent looks promising.
Check the costs it needs to cover
Rent can stop between tenants while loan and property costs continue. Allow for vacancy, repairs, management, insurance, rates and strata where applicable.
The repayment decision
Look at what happens over the life of the loan.
Repayment type, fees and flexibility should fit your circumstances. A lower initial repayment is only one part of the comparison.
Scheduled repayments cover interest and reduce the amount borrowed. Compare the ongoing commitment with the other costs and debts you need to manage.
02Interest-only
During an interest-only period, scheduled repayments do not reduce principal. Repayments can rise when that period ends, and the total interest cost can be higher. Eligibility and terms vary.
03Access and flexibility
Consider offset, redraw and extra-repayment conditions alongside the rate and fees. If funds will serve different purposes, discuss the tax implications with your accountant before choosing the structure.
04Security across properties
Ask which property secures each loan and what happens if you later sell or refinance. Separate loan accounts do not automatically remove the risk to a home used as security.
Property values and rental income can fall. You remain responsible for repayments and costs, including during vacancies. Tax treatment depends on your circumstances and current law; obtain qualified tax advice.
The next steps
Prepare the details behind the purchase.
Bring together the proposed property, your household position and a realistic allowance for ownership costs.
01
Price and purchase costs
Start with a price range and the funds you can contribute. Add the property details when you have found one.
02
Income and existing debts
List your income sources, loan balances, credit limits and regular expenses. Keep evidence of existing rental income where relevant.
03
Rental and expense estimates
Obtain a rental estimate and research the property’s ongoing costs. Include a buffer for repairs and periods without a tenant.
04
Questions for your advisers
Discuss borrowing with your Wity adviser. Take ownership, deductibility and tax questions to your accountant, and contract matters to your conveyancer.
Online loan matches are indicative options. Any lender approval requires verification, eligibility checks and full assessment.
A little more clarity
Before you take the next step.
A few useful answers. For the details that are specific to you, talk with our team.
General information and credit-assistance information only; not personal investment, tax or property advice. Online matches and estimates are indicative, not a recommendation or approval. Credit eligibility criteria, full assessment, terms, conditions and fees apply. Investment returns and rental income are not guaranteed.
